THE navy's newest $100 million amphibious ship has been tagged "HMAS Lemon Scented" after a major inspection earlier this year uncovered a raft of serious technical faults in the second-hand British vessel.

The problems include overheating of the propulsion motors and transformers and faulty air handling units that "could cause respiratory problems among passengers and crew - in particular legionnaires disease", the chief engineer officer's report says.

Overheating means that the ship cannot maintain full speed and the lack of natural ventilation means she can't operate at higher speeds "especially in higher sea temperature conditions".The ship, RFA Largs Bay, was designed to operate in cooler climates and many of the faults identified in the report are deep-seated "design issues".

The Gillard government purchased the mothballed Royal Fleet Auxiliary ship from the British government, claiming it was a major coup, but the official chief engineer's report casts serious doubts over those claims.

In the mid-1990s the Howard government issued a blunt warning about buying second-hand navy ships overseas after the amphibious ships HMAS Manoora and Kanimbla were found to be riddled with rust soon after they were purchased from the US Navy.

He listed six as critical: failure of the main engine room shut-down vents; fragility of the chilled water plants; suspect cargo lift systems; fragility of the vacuum toilet system; steering pump fragility; and lack of chemical treatment in the chilled and boiler water systems.